The computer giant Dell manages its value chain quite effectively and efficiently. The value chain is considered to be quite unique because the company sources all of components from vendors that are located in different parts of the world. The value chain of Dell and its direct model of selling are considered to be the main aspects of sustainable competitive advantage of Dell. The build to order supply chains of Dell are quite effective for the company (Barney 2006). All of these sources give a boost to the corporate strategy of Dell and through these aspects Dell maintains an advantage over other players.
The entire value chain of Dell computers is based on the Porter’s (1985) model. Dell follows the principle of outsourcing and it outsources all of its basic components like manufacturing, sub-assemblies which include motherboards and all the production of notebook PC’s. Dell does not outsource the final configuration and it keeps full control over supply and value chain. Motherboards of Dell computers are produced locally and elements like disk drives, cables, power systems and connectors are shipped from Asia.
Dell follows the policies of build-to-order and just-in time for managing its supply and value chain. The inventory of Dell maintains in the suppliers books unless Dell puts up an order. Only one major player in the industry Intel threatens Dell to take its inventory before acquiring the final customers (Barney 2006).
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